Oil prices rise after U.S. fuel stocks rise

Oil prices rise after U.S. fuel stocks rise

SINGAPORE - Oil prices edged higher on Thursday, supported by tensions in the Middle East, but failed to regain most of the previous day's losses after a surprise build in crude stocks in the United States, the world's top oil consumer.

Brent crude oil futures rose by 14 cents, or 0.2%, to $70.52 a barrel by 0132 GMT, while U.S. West Texas Intermediate crude futures were increased by 18 cents, or 0.3%, to $68.33 a barrel. On Wednesday, the benchmarks fell by more than $2 a barrel.

Israeli aircraft struck what its military said were launch points at missile sites in early June in south Lebanon in response to earlier projectile fire from Lebanese territory into Israel.

Two rockets launched from Lebanon on Wednesday struck Israel, which initially responded with artillery fire amid heightened regional tensions over an alleged Iranian attack on an oil tanker in the Gulf last week.

The exchange followed an attack last Thursday that Israel blamed on Iran for a tanker off the coast of Oman on a tanker in Iran. Two crew members died, a Romanian and a Briton. Iran denied any involvement in the war.

The U.S. State Department indicated on Wednesday that it believed Iranians hijacked an Asphalt Princess tanker in the Gulf of Oman, but was not in a position to confirm it.

Helping check gains, a rise in locally transmitted COVID - 19 cases in China, world's second largest oil consumer, that has promped restrictions in some cities and cancellation of flights is threatening demand, analysts said.

Prices also rose in the previous session after U.S. Energy Information Administration said crude stocks rose by an unexpected 3.6 million barrels last week. Still, some analysts pointed to a bigger than forecast 5.3 million barrel drop in fuel stockpiles.

The loss of U.S. gasoline stockpiles to the lowest level since November 2020 suggests that fuel demand conditions in the U.S. are still quite resilient, analysts from Commonwealth Bank of Australia said in a note on Thursday.

The bank expects Brent oil prices to rise by the fourth quarter to $85 a barrel as oil demand outpaces supply growth.